Press Release
ZF Continues Performance Improvement Trajectory
- Adjusted EBIT margin improves to 5.0 percent in the first half of 2026, up from 4.3 percent in H1 2025
- Organic sales growth of 0.5 percent despite continued market headwinds; sales reach €19.3 billion
Friedrichshafen, Germany. ZF Friedrichshafen AG improved its profitability in the first half of 2026. The company increased its adjusted EBIT margin to 5.0 percent, up from 4.3 percent in the prior-year period. Adjusted EBIT rose to €964 million (2025: €853 million). Sales were €19.3 billion, compared with €19.7 billion a year earlier. While sales declined 2.0 percent on a nominal basis, ZF achieved organic growth of 0.5 percent despite a persistently challenging market environment. Adjusted free cash flow improved by €524 million to €989 million.
“Cost discipline and a stronger focus on operational performance and value-creating products are beginning to deliver results,” said ZF CEO Mathias Miedreich on Thursday in Friedrichshafen. “The environment remains challenging, but we are making steady progress. Each step improves our performance and strengthens our financial flexibility.”
First-Half 2026 Financial Results
From January through June 2026, ZF generated sales of €19.3 billion (2025: €19.7 billion), representing a nominal decline of 2.0 percent. Adjusted for currency and M&A effects, sales increased organically by 0.5 percent year over year.
Adjusted EBIT reached €964 million (2025: €853 million), resulting in an adjusted EBIT margin of 5.0 percent (2025: 4.3 percent). Adjusted free cash flow totaled €989 million (2025: €465 million). The positive cash flow development was driven primarily by higher profitability and continued disciplined investment management. “Both factors further strengthened our cash-generation capabilities,” said CFO Michael Frick.
Cash flow was temporarily affected by payments related to restructuring provisions established in previous periods. These payments exceeded the prior-year level but remain an important part of the company’s long-term transformation process.
ZF’s continued focus on its product portfolio is also reflected in lower research and development spending and reduced capital expenditures. R&D expenses declined by around 7 percent to €1.6 billion, corresponding to an R&D ratio of 8.2 percent. Capital expenditure on property, plant and equipment fell by approximately 19 percent to €600 million.
Net debt stood at approximately €9.8 billion as of June 30, 2026. Leverage improved to 2.75x, down from 2.98x at year-end 2025. Available liquidity exceeded €7 billion, including an undrawn €3.5 billion revolving credit facility maturing in 2029.
As of June 30, 2026, ZF employed 149,675 people worldwide, a decrease of just over 2 percent compared with year-end 2025 (153,153). In Germany, headcount declined by more than 4 percent to 47,068 (year-end 2025: 49,210).
Full-Year Outlook Confirmed
Looking ahead, Frick said ZF remains well positioned to achieve its full-year 2026 targets, including sales of more than €38 billion.
The adjusted EBIT margin of 5.0 percent at mid-year is at the upper end of the company’s guided range of 4.0 percent to 5.0 percent. “This demonstrates that our performance program is increasingly gaining traction,” Frick said. “Together with disciplined cost management and ongoing structural measures, this positions us well to continue improving performance through the remainder of the year.” ZF also remains confident of achieving its full-year target of more than €1 billion in adjusted free cash flow.
At the same time, Frick highlighted the ongoing volatility of the market environment, particularly amid geopolitical tensions. The potential economic impact of these developments cannot yet be fully assessed. In addition, anticipated improvements in business conditions in Germany and Europe have yet to materialize. For the automotive industry, this continues to create a demanding environment that requires a consistent focus on performance and competitiveness.
